Correlation Between TAL Education and Hyundai
Can any of the company-specific risk be diversified away by investing in both TAL Education and Hyundai at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining TAL Education and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAL Education Group and Hyundai Motor, you can compare the effects of market volatilities on TAL Education and Hyundai and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in TAL Education with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAL Education and Hyundai.
Diversification Opportunities for TAL Education and Hyundai
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TAL and Hyundai is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and TAL Education is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on TAL Education Group are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of TAL Education i.e., TAL Education and Hyundai go up and down completely randomly.
Pair Corralation between TAL Education and Hyundai
Assuming the 90 days trading horizon TAL Education Group is expected to generate 2.09 times more return on investment than Hyundai. However, TAL Education is 2.09 times more volatile than Hyundai Motor. It trades about 0.11 of its potential returns per unit of risk. Hyundai Motor is currently generating about -0.08 per unit of risk. If you would invest 715.00 in TAL Education Group on September 2, 2024 and sell it today you would earn a total of 220.00 from holding TAL Education Group or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAL Education Group vs. Hyundai Motor
Performance |
| Timeline |
| TAL Education Group |
| Hyundai Motor |
TAL Education and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAL Education and Hyundai
The main advantage of trading using opposite TAL Education and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education position performs unexpectedly, Hyundai can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hyundai will offset losses from the drop in Hyundai's long position.| TAL Education vs. Tradegate AG Wertpapierhandelsbank | TAL Education vs. Webster Financial | TAL Education vs. QBE Insurance Group | TAL Education vs. PKSHA TECHNOLOGY INC |
| Hyundai vs. BLUESCOPE STEEL | Hyundai vs. CECO ENVIRONMENTAL | Hyundai vs. United States Steel | Hyundai vs. MITSUBISHI STEEL MFG |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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